U96.SI
Sembcorp Industries Ltd
Price:  
6.60 
SGD
Volume:  
4,271,100.00
Singapore | Multi-Utilities
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U96.SI WACC - Weighted Average Cost of Capital

The WACC of Sembcorp Industries Ltd (U96.SI) is 6.1%.

The Cost of Equity of Sembcorp Industries Ltd (U96.SI) is 8.00%.
The Cost of Debt of Sembcorp Industries Ltd (U96.SI) is 4.55%.

Range Selected
Cost of equity 6.70% - 9.30% 8.00%
Tax rate 15.60% - 16.20% 15.90%
Cost of debt 4.50% - 4.60% 4.55%
WACC 5.4% - 6.9% 6.1%
WACC

U96.SI WACC calculation

Category Low High
Long-term bond rate 2.7% 3.2%
Equity market risk premium 5.1% 6.1%
Adjusted beta 0.78 0.91
Additional risk adjustments 0.0% 0.5%
Cost of equity 6.70% 9.30%
Tax rate 15.60% 16.20%
Debt/Equity ratio 0.8 0.8
Cost of debt 4.50% 4.60%
After-tax WACC 5.4% 6.9%
Selected WACC 6.1%

U96.SI's CAPM model and how its cost of Equity is calculated

The Cost of Equity reflects the return a company needs to deliver to shareholders to justify the risk of investing in its shares. It’s computed using the Capital Asset Pricing Model (CAPM), which blends the risk-free rate, the stock’s beta, and the market risk premium.

This method evaluates the stock’s risk compared to a safe investment and the market’s overall volatility.

Here’s how we figure out the cost of equity for U96.SI:

cost_of_equity (8.00%) = risk_free_rate (2.95%) + equity_risk_premium (5.60%) * adjusted_beta (0.78) + risk_adjustments (0.25%)

We include the risk adjustments, which range from 0% to 1%, to keep our WACC conservatives, especially for companies traded in developing markets.